America's Original Business Scandal?

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If you want to think about the primordial founding of the United States, you'd probably do better to look toward Jamestown rather than Plymouth Rock. It was there that Captain John Smith conclusively demonstrated the advantage of free enterprise over welfare-state collectivism. Long before the men we call our Founding Fathers would set out their principles, Smith was proclaiming America a land of freedom and opportunity.
But it was also home to our founding business scandal, Mark Gimein argues in his Curious Capitalist column. Less than two decades after the founding of the Virginia colony, the Crown revoked the Virginia Company's charter, seized its assets and put the colony under the administration of the crown. The investors in the Virginia Company lost everything.
Why had things worked out so badly? It was all big tobacco's fault, according to Gimein. The fatality rate of colonists was scandalously high. "Among the reasons for this were the Virginia Company's desperate efforts to make the colony profitable by mandating the planting of tobacco instead of food," Gimein writes.
While we have no special allegiance to the Virginia Company, we can't help but wonder if Gimein is being a little too gullible of the British crown's rationale for taking the assets of the company's investors. We can easily squint our eyes and see this as a power grab by the state eager to capture revenue from the newly profitable colony. Jamestown might have been the first business scandal in North America. Or it might have been the first time the government used business failure and public health concerns as a pretext for increasing its own power.
Whatever it was, we're now in the 400th anniversary of its founding.
400 Years of Corporate Scandal: An Anniversary [Curious Capitalist]

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